World grain market: wheat, corn and soybeans fell sharply on Thursday

On Thursday, September 21, 2023, wheat futures on the Chicago Board of Trade (CBOT) fell as the US dollar rose. At the end of the trading day, December quotations of soft winter wheat on the Chicago Mercantile Exchange CBOT fell to $211.55 per ton, December futures of hard winter wheat KCBT in Kansas City - to $261.06 per ton, December futures of hard spring wheat MGEX - to $282, 00 per ton.

Prices for corn, soybeans and wheat in Chicago fell on Thursday. Markets were held back by a sharp rise in the dollar and high short-term inventories in international grain markets.

Soybeans hit a one-month low and corn held close to a nearly three-year low as a growing U.S. crop added to supply pressure from rival exporter Brazil.

The dollar hit a six-month high on Thursday after the US Federal Reserve signaled policy would remain restrictive further, further clouding the outlook for US grain exports.

Chicago Mercantile Exchange November soybean futures fell 26-1/4 cents to $12.93-3/4 a bushel after hitting $12.93, the contract's lowest since Aug. 8. December CBOT corn futures fell 7 cents to $4.75-1/4 a bushel and December wheat fell 13 cents to $5.75-3/4.

Soybean futures extended their decline after the U.S. Department of Agriculture (USDA) reported U.S. soybean export sales for the week ended September 14 at 434,100 metric tons, below the range of trade expectations. Weekly corn sales of 566,900 tons were also below expectations. The USDA's confirmation of daily private sales of 137,160 tons of US corn to Mexico did not improve traders' sentiment. The US Department of Agriculture reported that US wheat export sales for the week ending September 14 were 321,700 metric tons, in line with trade expectations.

Export demand for U.S. grains is lagging amid ample supplies of both crops from Brazil, a strong dollar and low Mississippi River levels that are slowing barge traffic to Gulf export terminals.

The International Grains Council (IGC) has raised its forecast for the 2023/24 global corn harvest by 1 million tonnes to 1.222 billion tonnes in its monthly update.

However, the International Grains Council (IGC) has cut its global wheat harvest forecast for the 2023/24 season by 1 million tonnes to 783 million tonnes. IGC raised its estimate of the wheat harvest in Russia to 87.4 million tons from 84.4 million, and the wheat harvest in Ukraine to 25.9 million from 24.5 million tons. However, the IGC lowered its estimates for Australia, Canada and Argentina. These countries are harvesting later this year than Russia, Europe and the United States, raising the threat of supply shortages in the coming months.

Overall, the IGC cut its 2023/24 global wheat crop forecast by 1 million metric tons to 783 million tons.

At the Chicago Board of Trade (CBOT) on Thursday, contracts for delivery in November and December:

wheat (DCBR 2023) - 211.55 dollars/t (20,440 rubles/t) - minus 2.21%;
corn (DCBR 2023) - 187.11 dollars/t (18,080 rubles/t) - minus 1.45%;
soybeans (NBR 2023) - 475.36 USD/t (45930 RUB/t) - minus 1.99%;
rice November (November 2023) - 773.89 dollars/t (74,770 rub./t) - minus 1.47%;
rapeseed (ICE, Nov. 2023) - 725.30 cad/t (52,200 rub./t) - minus 1.47%.

On Thursday, the French grain market declined. At the end of the trading day, December quotes for milling wheat on the Paris MATIF exchange dropped to €236.25 a ton (in dollar equivalent - to $251.82). November corn futures - up to €208.25 per ton (in dollar equivalent - up to $221.97).

On the Paris Exchange (MATIF) on Thursday, quotes for November and December contracts at the closing of trading were:

flour milling wheat (DCBR 2023) - 251.82 dollars/t (24,330 rubles/t) - minus 1.11%;
corn (NBR 2023) - $221.97/t (RUB 21,450/t) - minus 0.53%;
sunflower (Sept. on the SAFEX exchange - 8880.00 zar./t (45,300 rub./t);
sunflower oil (St. Rotterdam, bulk FOB) - 880.00 USD/t (85020 RUB/t) 0%.

For reference, exchange rates as of September 21, 2023:
96.6172 rub. = US dollar
RUB 103.3699 = Euro
RUB 71.9628 = Canadian dollar
RUB 51.0106 = 10 South African rand